Private equity firm Advent International has taken a majority stake in Swiss duty-free retailer Dufry by means of a share swap that combines it with the US firm’s airport retailer Hudson.
Dufry, which already held an 11.2% stake in Hudson that it bought in April, said on Thursday it was swapping Hudson’s common stock for Dufry equity and refinancing its approximately US$390m in debt. The total value of Hudson’s equity is US$446m.
As part of the deal, Dufry said it had structured a five-year committed syndicated facility of about CHF 1.25bn (US$1.13bn), which will “provide sufficient financial flexibility to pursue its growth strategy”.
After the full completion of the deal, Advent will hold 26.7% of Dufry, while Travel Retail Investments, controlled by funds managed by Advent, will hold 26.9%, reducing the free float of Dufry shares to 46.4%.
Dufry, which operates around 466 duty-free and duty-paid shops in airports and other tourist areas, said in a statement Hudson had turnover of US$666m in 2007 and earnings before interest, tax, depreciation and amortisation of US$85m.
The combined group will operate 1,000 shops at 137 airports with a pro forma combined 2007 turnover of about CHF2.6bn. Dufry said it expected to realise annual revenue and cost synergies of about CHF20m within two years.
“The combination of Hudson’s retailing expertise with Dufry’s know-how in international markets and global footprint are a perfect match to create a duty-paid convenience store concept on an international scale,” said Dufry Chief Executive Julian Diaz.